As Chicago’s tech market has blossomed in recent years, it has spurred numerous positive effects across the city, notably in a new wave of employment, and, commercial real estate fundamentals.
Submarkets that have a strong concentration of tech tenants have seen a huge jump in rent growth compared to the overall market, especially in Class B and C product.
Tech rich River North, which counts 26.9 percent of its tenants as tech firms, experienced a 38 percent growth in Class B and C rents since 2011. In River North, more than 75 percent of all tech tenants office in two buildings—600 W. Chicago Ave. and the Merchandise Mart–home to firms such as Groupon and Yelp.
The West Loop, which counts 9.4 percent of its tenants as tech companies, has experienced a rent growth of 21 percent in that same time period.
Overall CBD class B rents have grown by 14 percent since 2011.
“Not only have the major markets like River North benefited from this activity, but, surrounding neighborhoods have recently seen an increase in leasing as well,” said Paul Reaumond, SVP. “Building owners east and south of the Chicago River have taken advantage of their proximity to River North and have modified office space to attract users typically focused on less traditional office buildings. These locations have been able to draft off of River North by providing similar access to amenities and often have more public transportation options.”
Read the entire report here.